The Trump administration is weighing an initiative to promote dollar-denominated stablecoins overseas, a move aimed at bolstering the US dollar's position as the world's reserve currency and increasing demand for US Treasuries. This strategy could involve federal agencies like the Treasury Department, State Department, and the US International Development Finance Corporation (DFC) forming joint ventures with private-sector stablecoin firms. The GENIUS Act, which established a regulatory framework for payment stablecoins, is central to this plan, as it requires issuers to back tokens one-for-one with reserves like short-term Treasury bills. Secretary Scott Bessent has previously suggested the stablecoin market could grow tenfold to $3 trillion by the end of the decade, driving significant demand for US government debt.
While the plan's specific firms, structure, funding, and timeline remain undisclosed and are still under consideration, the intent is clear: to leverage the growth of dollar-backed stablecoins to create new foreign demand for US debt. Stablecoin issuers already hold substantial amounts of US sovereign debt, with figures around $200 billion as of September 2026, placing them among the top holders globally. For example, Tether alone had approximately $141 billion in direct and indirect US Treasury exposure by March 2026. This initiative would seek to scale up this demand, particularly at a time when 10-year Treasury yields have topped 5.1%, a 19-year high.
However, the growth of stablecoins has recently stalled, with Tether's USDT falling to around $184 billion and Circle's USDC declining to about $72 billion in the first half of 2026. An overseas push would focus on payments and remittances, uses less tied to crypto trading cycles. There are also limitations to the plan, as stablecoin demand primarily supports the front end of the curve (short-dated bills), whereas the current strain is concentrated in 10-year and 30-year debt. Furthermore, international bodies like the IMF and Bank for International Settlements have warned that widespread adoption of dollar-pegged stablecoins could accelerate capital flight, weaken domestic currencies, and limit monetary control in emerging economies.
